I concur with the previous posts and don’t have much else to add but this. A C-corp experiences double taxation and a sole proprietorship has little or no personal liability protection. When forming my own business, it came down to an S-corp or an LLC. I chose an LLC because it entailed less maintenance and provided me with personal liability protection.

I incorporated my LLC through the state of Nevada using LegalZoom. To me, Nevada seemed like one of the more business-friendly states and they said it was much more difficult to pierce the corporate veil. California apparently has a hard-on for sticking it to corporations, small or large.

I second Shadowfax’s recommendation to have a separate LLC for each property. 3245 Plaza Ct LLC, 12678 Bluff Canyon LLC, etc. I recall a foreclosure guru that this site has highlighted a while back recommending the same thing.

If you incorporate in Nevada you will have to pay an annual resident agent fee (~$150) for service of process unless you or someone you know lives there. You will also have to pay (if I recall) a $100-$125 per year to update your annual list of officer(s). Then there’s the $800 annual fee to the state of California.

There will also be a lot of record keeping if you plan on expanding on this model. You might want to consider setting up a separate bank account for each, unless they are to fall under an umbrella corporation. But I am sure this would entail a whole other set of circumstances.